Pricing Strategies

Pricing Strategies / en Mon, 28 Apr 2025 03:06:14 -0500 Fri, 20 May 22 11:46:33 -0500 Perspective: RAND 4.0 on Hospital Pricing Again Misses the Mark /news/perspective/2022-05-20-perspective-rand-40-hospital-pricing-again-misses-mark Hospitals and health systems work hard every day to deliver high-quality health care services to all patients in their communities. At the same time, they also continue to lead many efforts to advance affordability in health care. Advancing affordability in health care also is a key focus area of the AHA’s advocacy efforts. We have worked to protect patients from out-of-network medical bills (also known as surprise bills) and supported useful price transparency efforts to ensure patients have access to the information they seek when preparing for care, such as what their out-of-pocket costs are given their particular insurance plan. Among other priorities, we continue to urge Congress and the Administration to rein in the rising costs of drugs; help make health care coverage more affordable; clamp down on wasteful administrative costs caused by certain commercial health insurer <a href="/news/blog/2022-05-02-five-ways-commercial-insurer-policies-drive-costs-and-hurt-patients" target="_blank">practices</a>&nbsp;and support providers to transition to value-based reimbursement where it makes sense. Earlier this week, we challenged the <a href="/news/blog/2019-05-17-aha-reaction-rand-study" target="_blank">findings</a> of the RAND Corporation’s fourth <a href="https://www.rand.org/pubs/research_reports/RRA1144-1.html" target="_blank">paper</a> looking at hospital prices, which measures and reports the prices paid for care at the hospital and service-line level. Like its predecessors, this latest work once again overreaches and jumps to unfounded conclusions based on incomplete data. For one thing, it looks at claims for just 2.2% of overall hospital spending, which, no matter how you slice it, represents a small share of what actually happens in hospitals and health systems in the real world. RAND 4.0 also continues to ignore that hospitals are not all the same. Hospitals and health systems provide different services, and many offer different specialties. These differences are meaningful in terms of the cost of delivering services across the wide range of U.S. hospitals — from rural critical access hospitals to large academic medical centers. Tellingly this year, when RAND calculated more claims as compared to previous versions of this paper, the average price for hospital services actually declined. This suggests what we have long suspected: You just can’t draw credible conclusions from such a limited and biased set of claims. But perhaps RAND 4.0’s most significant flaw is using Medicare reimbursement rates as an appropriate benchmark for price comparison … when even the Medicare Payment Advisory Commission acknowledges that Medicare does not fully cover the cost of providing care to Medicare beneficiaries. As noted in a recent <a href="/news/blog/2022-04-29-four-reasons-medicare-inadequate-benchmark-commercial-health-plans" target="_blank">AHA blog</a>&nbsp;Medicare reimbursement rates do not cover the actual cost of the care provided, and are slow to respond to inflation, supply shortages and increased costs for staff. They also can be subject to the whims of political pressure. For these reasons, linking commercial prices to inadequate Medicare rates would cause even more financial strain to hospitals already facing tremendous challenges as a result of the ongoing COVID-19 pandemic and <a href="/costsofcaring" target="_blank">rising inflation</a>. The result could be reduced patient access to care. Policymakers should be strengthening payment rates from Medicare, not holding them up as the gold standard. Hospitals and health systems are the only sector that provides life-saving 24/7 care to everyone who needs it, and we are committed to make care more affordable by transforming the way health care is delivered in our communities. But we cannot do it alone. It will take a real effort by everyone involved — providers, the government, employers and individuals, device makers, drug manufacturers, insurers and others. Fri, 20 May 2022 11:46:33 -0500 Pricing Strategies AHA Statement on Rand Study on Hospital Prices /press-releases/2022-05-17-aha-statement-rand-study-hospital-prices Rick Pollack President and CEO �� Association May 17, 2022 Once again, the RAND Corporation’s latest hospital pricing report overreaches and jumps to unfounded conclusions based on incomplete data. The report looks at claims for just 2.2% of overall hospital spending, which, no matter how you slice it, represents a small share of what actually happens in hospitals and health systems in the real world. RAND also continues to ignore that hospitals are not all the same. Researchers should expect variation in the cost of delivering services across the wide range of U.S. hospitals – from rural critical access hospitals to large academic medical centers. Tellingly, when RAND added more claims as compared to previous versions of this report, the average price for hospital services declined. This suggests what we have long suspected: you simply cannot draw credible conclusions from such a limited and biased set of claims. Further, the results highlight what even the Medicare Payment Advisory Commission (MedPAC) acknowledges: Medicare does not fully cover the cost of providing care to Medicare beneficiaries. Pinning commercial prices to inadequate Medicare rates would cause even more financial strain to hospitals already facing tremendous challenges as a result of the ongoing COVID-19 pandemic and rising inflation. The result could be reduced patient access to care. ### Contact:&nbsp; &nbsp; &nbsp; Sean Barry, (202) 626-2306, <a href="mailto:sbarry@aha.org">sbarry@aha.org</a> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;&nbsp;Marie Johnson, (202) 626-2351, <a href="mailto:mjohnson@aha.org">mjohnson@aha.org</a> Tue, 17 May 2022 11:29:10 -0500 Pricing Strategies AHA Statement on Rand Report on Hospital Pricing /press-releases/2021-02-18-aha-statement-rand-report-hospital-pricing Rick Pollack President and CEO �� Association February 18, 2021 Hospitals are doing their part to contain costs, as evidenced by the 1.9% increase in price growth per year on average over the last decade, according to the U.S. Bureau of Labor Statistics. Many have also struggled financially during the COVID-19 pandemic, with an estimated $320 billion in lost revenue in 2020 alone. And yet, hospitals and health systems continue to be there for their communities no matter what and are the only sector that provide life-saving 24/7 care to everyone who needs it. This is reflected in the $660 billion in uncompensated care provided to patients since 2000 and $100 billion in community benefits in 2017. Unfortunately, RAND ignores the unique role of hospitals and health systems and dismisses rising costs and market concentration in the commercial health insurance industry, which is earning record profits during the public health emergency while spending less on actual care. RAND continues to regurgitate older and flawed “studies,” which may be why they land on a poorly-reasoned proposal to have the government regulate prices. Despite claims otherwise, it is widely acknowledged that Medicare and Medicaid – the two largest public programs – pay below the cost of delivering care. Price-setting would only enrich commercial health insurers at the expense of innovations in care that truly benefit patients. &nbsp;### Contact:&nbsp;Marie Johnson, (202) 626-2351,&nbsp;<a href="mailto:mjohnson@aha.org">mjohnson@aha.org</a> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; Sean Barry, (202) 626-2306, <a href="mailto:mjohnson@aha.org">sbarry@aha.org</a> Thu, 18 Feb 2021 12:45:05 -0600 Pricing Strategies Action Alert: Model Comment Letter on Proposed Rule Requiring Health Plans to Disclose Negotiated Rates and Personalized Cost-sharing Information /action-alert/2020-01-17-model-comment-letter-proposed-rule-requiring-health-plans-disclose Please submit your comments by Jan. 29; AHA will submit its own, more extensive comments The AHA has developed a model comment letter for hospitals and health systems to use to submit comments to the Departments of the Treasury, Labor, and Health and Human Services (the departments) on their proposal to require health plans to disclose all of their negotiated rates, as well as personalized cost-sharing information. The letter includes language detailing our concerns with the proposal to require the disclosure of negotiated rates, and encourages the departments not to finalize this proposal. <a href="/system/files/media/file/2020/01/ModelCommentsonTransparencyinCoverageProposedRule__0.DOCX">Click here</a> to download the model letter. Please update the letter with your organization’s information and submit it on your letterhead before the Jan. 29 deadline. All comments must be submitted before 5 p.m. ET. Please refer to file code CMS-9915-P when you submit your letter. You may submit electronic comments at <a href="https://www.regulations.gov/" target="_blank">https://www.regulations.gov/</a> by following the instructions under the "submit a comment" tab. For questions on the model letter, please contact Ariel Levin, AHA senior associate director of policy, at <a href="mailto:alevin@aha.org?subject=CMS-1717-P Comment letters" target="_blank">alevin@aha.org</a>. The AHA will submit its own, more extensive comments on these policies, in addition to our comments on the other policies proposed in the rule. Fri, 17 Jan 2020 08:39:23 -0600 Pricing Strategies AHA reacts to study on prices paid by private health plans to hospitals /news/headline/2019-05-17-aha-reacts-study-prices-paid-private-health-plans-hospitals A <a href="https://www.rand.org/pubs/research_reports/RR3033.html">study</a>&nbsp;released last week by Rand on prices paid by private health plans to hospitals “relied on severely limited data and questionable assumptions to draw far-reaching conclusions about the way hospitals are paid for patient care,” writes Aaron Wesolowski, AHA vice president for policy research, analytics and strategy, in an AHA Stat Blog <a href="/news/blog/2019-05-17-aha-reaction-rand-study">post</a> today. “And, despite these limitations, the authors have looked at a pond, and drawn conclusions about the ocean.” &nbsp; Fri, 17 May 2019 14:41:41 -0500 Pricing Strategies